(b) Additionally Eligible State. A State in which the total value
of funding agreements awarded to SBCs (as defined in this section)
under all agency SBIR Programs is less than the total value of funding
agreements awarded to SBCs in a majority of other States, as determined
by SBA's Administrator in biennial fiscal years and based on the most
recent statistics compiled by the Administrator.

(c) Applicant. The organizational entity that, at the time of
award, will qualify as an SBC and that submits a contract proposal or a
grant application for a funding agreement under the SBIR Program.

(d) Affiliate. This term has the same meaning as set forth in 13
CFR part 121--Small Business Size Regulations, Sec. 121.103, What is
affiliation?

(f) Commercialization. The process of developing marketable
products or services and producing and delivering products or services
for sale (whether by the originating party or by others) to Government
or commercial markets.

(g) Cooperative Agreement. A financial assistance mechanism used
when substantial Federal programmatic involvement with the awardee
during performance is anticipated by the issuing agency. The
Cooperative Agreement contains the responsibilities and respective
obligations of the parties.

(h) Eligible State. A State: (1) where the total value of SBIR and
Small Business Technology Transfer (STTR) Program awards made to
recipient businesses in the State during fiscal year 1995 was less than
$5,000,000 (as reflected in SBA's database of fiscal year 1995 awards),
and (2) that certifies to SBA's Administrator that it will, upon
receipt of assistance, provide matching funds from non-Federal sources
in an amount that is not less than 50 percent of the amount of
assistance provided.

(i) Essentially Equivalent Work. This occurs when (1) substantially
the same research is proposed for funding in more than one contract
proposal or grant application submitted to the same Federal agency; (2)
substantially the same research is submitted to two or more different
Federal agencies for review and funding consideration; or (3) a
specific research objective and the research design for accomplishing
an objective are the same or closely related in two or more proposals
or awards, regardless of the funding source.

(j) Extramural Budget. The sum of the total obligations for R/R&D
minus amounts obligated for R/R&D activities by employees of a Federal
agency in or through Government-owned, Government-operated facilities.
For the Agency for International Development, the ``extramural budget''
must not include amounts obligated solely for general institutional
support of international research centers or for grants to foreign
countries. For the Department of Energy, the ``extramural budget'' must
not include amounts obligated for atomic energy defense programs solely
for weapons activities or for naval reactor programs. (Also see Section
7(i) of this Policy Directive for additional exemptions related to
national security.)

(k) Feasibility. The practical extent to which a project can be
performed successfully.

(l) Federal Agency. An executive agency as defined in 5 U.S.C. 105,
or a military department as defined in 5 U.S.C. 102, except that it
does not include any agency within the Intelligence Community as
defined in Executive Order 12333, Section 3.4(f), or its successor
orders.

(m) Funding Agreement. Any contract, grant, or cooperative
agreement entered into between any Federal agency and any SBC for the
performance of experimental, developmental, or research work, including
products or services, funded in whole or in part by the Federal
Government.

(o) Grant. A financial assistance mechanism providing money,
property, or both to an eligible entity to carry out an approved
project or activity. A grant is used whenever the Federal agency
anticipates no substantial programmatic involvement with the awardee
during performance.

(p) Innovation. Something new or improved, having marketable
potential, including (1) development of new technologies, (2)
refinement of existing technologies, or (3) development of new
applications for existing technologies.

(q) Intellectual Property. The separate and distinct types of
intangible property that are referred to collectively as ``intellectual
property,'' including but not limited to: patents, trademarks,
copyrights, trade secrets, SBIR technical data (as defined in this
section), ideas, designs, know-how, business, technical and research
methods, other types of intangible business assets, and all types of
intangible assets either proposed or generated by an SBC as a result of
its participation in the SBIR Program.

(r) Joint Venture. An association of concerns with interests in any
degree or proportion by way of contract, express or implied, consorting
to engage in and carry out a single specific business venture for joint
profit, for which purpose they combine their efforts, property, money,
skill, or knowledge, but not on a continuing or permanent basis for
conducting business generally. A joint venture is viewed as a business
entity in determining power to control its management.

(s) Outcomes. The measures of long-term, eventual, program impact.

(t) Outputs. The measures of near-term program impact.

(u) Principal Investigator/Project Manager. The one individual
designated by the applicant to provide the scientific and technical direction to a
project supported by the funding agreement.

(v) Program Solicitation. A formal solicitation for proposals
whereby a Federal agency notifies the small business community of its
R/R&D needs and interests in broad and selected areas, as appropriate
to the agency, and requests proposals from SBCs in response to these
needs and interests. Announcements in the Federal Register or the GPE
are not considered an SBIR Program solicitation.

(w) Prototype. A model of something to be further developed, which
includes designs, protocols, questionnaires, software, and devices.

(x) Research or Research and Development (R/R&D). Any activity that
is:
(1) A systematic, intensive study directed toward greater knowledge
or understanding of the subject studied;
(2) A systematic study directed specifically toward applying new
knowledge to meet a recognized need; or
(3) A systematic application of knowledge toward the production of
useful materials, devices, and systems or methods, including design,
development, and improvement of prototypes and new processes to meet
specific requirements.

(y) Small Business Concern. A concern that, on the date of award
for both Phase I and Phase II funding agreements:
(1) is organized for profit, with a place of business located in
the United States, which operates primarily within the United States or
which makes a significant contribution to the United States economy
through payment of taxes or use of American products, materials or
labor;
(2) is in the legal form of an individual proprietorship,
partnership, limited liability company, corporation, joint venture,
association, trust or cooperative, except that where the form is a
joint venture, there can be no more than 49 percent participation by
foreign business entities in the joint venture;
(3) is at least 51 percent owned and controlled by one or more
individuals who are citizens of, or permanent resident aliens in, the
United States, except in the case of a joint venture, where each entity
to the venture must be 51 percent owned and controlled by one or more
individuals who are citizens of, or permanent resident aliens in, the
United States; and
(4) has, including its affiliates, not more than 500 employees.

(aa) SBIR Participants. Business concerns that have received SBIR
awards or that have submitted SBIR proposals/applications.
(bb) SBIR Technical Data. All data generated during the performance
of an SBIR award.

(cc) SBIR Technical Data rights. The rights an SBC obtains in data
generated during the performance of any SBIR Phase I, Phase II, or
Phase III award that an awardee delivers to the Government during or
upon completion of a Federally-funded project, and to which the
Government receives a license.

(dd) Subcontract. Any agreement, other than one involving an
employer-employee relationship, entered into by an awardee of a funding
agreement calling for supplies or services for the performance of the
original funding agreement.

(ee) Technology Development Program.
(1) the Experimental Program to Stimulate Competitive Research of
the National Science Foundation as established under 42 U.S.C. 1862g;
(2) the Defense Experimental Program to Stimulate Competitive
Research of the Department of Defense;
(3) the Experimental Program to Stimulate Competitive Research of
the Department of Energy;
(4) the Experimental Program to Stimulate Competitive Research of
the Environmental Protection Agency;
(5) the Experimental Program to Stimulate Competitive Research of
the National Aeronautics and Space Administration;
(6) the Institutional Development Award Program of the National
Institutes of Health; and
(7) the National Research Initiative Competitive Grants Program of
the Department of Agriculture.

(ff) United States. Means the 50 states, the territories and
possessions of the Federal Government, the Commonwealth of Puerto Rico,
the District of Columbia, the Republic of the Marshall Islands, the
Federated States of Micronesia, and the Republic of Palau.

(gg) Women-Owned SBC. An SBC that is at least 51 percent owned by
one or more women, or in the case of any publicly owned business, at
least 51 percent of the stock is owned by women, and women control the
management and daily business operations.